THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT FLORIDA
PENSACOLA DIVISION
STATE FLORIDA, and through Attorney General Pam Bondi, al.;
Plaintiffs, Case No.: 3:10-cv-91-RV/EMT
UNITED STATES DEPARTMENT HEALTH AND HUMAN SERVICES, al.,
Defendants. ____________________________________/
ORDER GRANTING SUMMARY JUDGMENT March 23, 2010, President Obama signed health care reform legislation: The Patient Protection and Affordable Care Act. Pub. No. 111-148, 124 Stat. 119 (2010), amended the Health Care and Education Reconciliation Act 2010, Pub. No. 111-152, 124 Stat. 1029 (2010) (the Act).
This case, challenging the Constitutionality the Act, was filed minutes after the President signed. has been brought the Attorneys General and/or Governors twenty-six states (the state plaintiffs)1; two private citizens (the individual plaintiffs); and the National Federation Independent Business (NFIB) (collectively, the plaintiffs). The defendants are the United States Department Health and Human Services, the Department Treasury, the Department Labor, and their secretaries (collectively, the defendants). emphasized once before, but bears repeating again: this case not about The states are Alabama, Alaska, Arizona, Colorado, Florida, Georgia, Idaho, Indiana, Iowa, Kansas, Louisiana, Maine, Michigan, Mississippi, Nebraska, Nevada, North Dakota, Ohio, Pennsylvania, South Carolina, South Dakota, Texas, Utah, Washington, Wisconsin, and Wyoming.
whether the Act wise unwise legislation, whether will solve exacerbate
the myriad problems our health care system. fact, not really about our
health care system all. principally about our federalist system, and raises
very important issues regarding the Constitutional role the federal government.
James Madison, the chief architect our federalist system, once famously
observed: men were angels, government would necessary. angels were govern men, neither external nor internal controls government would necessary. framing government which administered men over men, the great difficulty lies this: you must first enable the government control the governed; and the next place oblige control itself.
The Federalist No. 51, 348 (N.Y. Heritage Press ed., 1945) (The Federalist).2 establishing our government, the Founders endeavored resolve Madisons identified great difficulty creating system dual sovereignty under which [t]he powers delegated the proposed Constitution the federal government are few and defined. Those which are remain the State governments are numerous and indefinite. The Federalist No. 45, 311 (Madison); see also U.S. Const. art. (setting forth the specific legislative powers herein granted Congress). When the Bill Rights was later added the Constitution 1791, the Tenth Amendment reaffirmed that relationship: The powers not delegated the United States the Constitution, nor prohibited the States, are reserved The Federalist consists articles essays written James Madison, Alexander Hamilton, and John Jay, advocating for ratification the Constitution. The opinion the Federalist has always been considered great authority. complete commentary our constitution; and appealed all parties the questions which that instrument has given birth. Its intrinsic merit entitles this high rank. Cohens Virginia, U.S. Wheat) 264, 418, Ed. 257 (1821) (Marshall, C.J.). will cited to, and relied on, several times throughout the course this opinion.
the States respectively, the people.
The Framers believed that limiting federal power, and allowing the residual power remain the hands the states (and the people), would help ensure protection our fundamental liberties and reduce the risk tyranny and abuse. See Gregory Ashcroft, 501 U.S. 452, 458, 111 Ct. 2395, 115 Ed. 410 (1991) (citation omitted). Very early, the great Chief Justice John Marshall noted that those limits may not mistaken, forgotten, the constitution written. Marbury Madison, U.S. Cranch) 137, 176, Ed. (1803). Over two centuries later, this delicate balancing act continues. Rather than being the mere historic relic bygone era, the principle behind central government with limited power has never been more relevant than this day, when accretion, not actual accession, power the federal government seems not only unavoidable, but even expedient. Brzonkala Virginia Polytechnic Institute, 169 F.3d 820, 826 (4th Cir. 1999) (en banc), affd sub nom, United States Morrison, 529 U.S. 598, 120 Ct. 1740, 146 Ed. 658 (2000).3 say that the federal government has limited and enumerated power does not get one far, however, for that statement long-recognized and well-settled United States Lopez, 514 U.S. 549, 115 Ct. 1624, 131 Ed. 626 (1995), watershed decision that will discussed infra, the Supreme Court began its analysis referring these limits federal power first principles. manner speaking, they may said last principles well, for the Lopez Court deemed them important that also ended its opinion with full discussion them. See id. 567-68. Shortly thereafter, United States Morrison, 529 U.S. 598, 120 Ct. 1740, 146 Ed. 658 (2000), which will also discussed infra, the Supreme Court referred the division authority and limits federal power the central principle our constitutional system. See id. 616 n.7. Clearly, the modern Supreme Court regards the limits federal power first, central, and last principles, those principles are profoundly important --- even this day and age --- and they must treated accordingly deciding this case.
truism. McCulloch Maryland, U.S. Wheat) 316, 405, Ed. 579 (1819) (This government acknowledged all, one enumerated powers. The principle, that can exercise only the powers granted it, now universally admitted.) (Marshall, C.J.). The ongoing challenge deciding whether particular federal law falls within outside those powers. frequently difficult task and the subject heated debate and strong disagreement. Chief Justice Marshall aptly predicted nearly 200 years ago, while everyone may agree that the federal government one enumerated powers, the question respecting the extent the powers actually granted, perpetually arising, and will probably continue arise, long our system shall exist. Id. This case presents such question.
BACKGROUND
The background this case --- including discussion the original claims, the defenses, and overview the relevant law --- set out order dated October 14, 2010, which addressed the defendants motion dismiss, and incorporated herein. will only discuss the background necessary resolving the case has been winnowed down the two causes action that remain. Count all the plaintiffs challenge the individual mandate set forth Section 1501 the Act, which, beginning 2014 will require that everyone (with certain limited exceptions) purchase federally-approved health insurance, pay monetary penalty.4 The individual mandate allegedly violates the Commerce Clause, previously rejected the defendants argument that this penalty was really tax, and that any challenge thereto was barred the Anti-Injunction Act. earlier ruling the defendants tax argument incorporated into this order and, significantly, has the effect focusing the issue the individual mandate whether authorized the Commerce Clause. date, every court consider this issue (even those that have ruled favor the federal government) have also rejected the tax and/or Anti-Injunction arguments. See Goudy-Bachman U.S. Dept Health Human Servs., 2011 223010, *9-*12 (M.D. Pa. Jan. 24, 2011); Virginia Sebelius, 728 Supp. 768, 786-88 (E.D. Va. 2010); Liberty
which the provision the Constitution Congress relied passing it. Count IV, the state plaintiffs challenge the Act the extent that alters and amends the Medicaid program expanding that program, inter alia, to: (i) include individuals under the age with incomes 133% the federal poverty level, and (ii) render the states responsible for the actual provision health services thereunder. This expansion Medicaid allegedly violates the Spending Clause and principles federalism protected under the Ninth and Tenth Amendments. The plaintiffs seek declaratory judgment that the Act unconstitutional and injunction against its enforcement.
These two claims are now pending cross motions for summary judgment (docs. 80, 82), which pre-trial vehicle through which party shall prevail the evidence the record shows that there genuine dispute any material fact and the movant entitled judgment matter law. Fed. Civ. 56. While the parties dispute numerous facts (primarily the context the Medicaid count, noted infra), they appear agree that disposition this case summary judgment appropriate --- the dispute ultimately comes down to, and involves, pure issues law. Both sides have filed strong and well researched memoranda support their motions for summary judgment (Mem.), responses opposition (Opp.), and replies (Reply) further support. held lengthy hearing and oral argument the motions December 16, 2010 (Tr.). addition this extensive briefing the parties, numerous organizations and individuals were granted leave to, and did, file amicus curiae briefs (sixteen total) support the arguments and claims issue.
Univ., Inc. Geithner, --- Supp. ---, 2010 4860299, *9-*11 (W.D. Va. Nov. 30, 2010); U.S. Citizens Assoc. Sebelius, --- Supp. ---, 2010 4947043, (N.D. Ohio Nov. 22, 2010); Thomas More Law Center Obama, 720 Supp. 882, 890-91 (E.D. Mich. 2010). have carefully reviewed and considered all the foregoing materials, and now set forth rulings the motions and cross-motions for summary judgment. will take the plaintiffs two claims reverse order.
DISCUSSION Medicaid Expansion (Count Four)
For this claim, the state plaintiffs object the fundamental and massive changes the nature and scope the Medicaid program that the Act will bring about. They contend that the Act violates the Spending Clause [U.S. Const. art. cl. significantly expands and alters the Medicaid program such extent they cannot afford the newly-imposed costs and burdens. They insist that they have choice but remain Medicaid amended the Act, which will eventually require them run their budgets off cliff. This alleged violate the Constitutional spending principles set forth South Dakota Dole, 483 U.S. 203, 107 Ct. 2793, Ed. 171 (1987), and other cases.5
Under Dole, there are four restrictions Congress Constitutional spending power: (1) the spending must for the general welfare; (2) the conditions must stated clearly and unambiguously; (3) the conditions must bear relationship the purpose the program; and the conditions imposed may not require states to engage activities that would themselves unconstitutional. Supra, 483 U.S. 207-10. addition, spending condition cannot coercive. This conceptional requirement also from Dole, where the Supreme Court speculated (in dicta the end that opinion) that in some circumstances the financial inducement offered Congress might coercive pass the point which pressure turns into The state plaintiffs alleged their complaint that the Medicaid provisions also violated the Ninth and Tenth Amendments, but those claims have not been advanced briefed their summary judgment motion (except single passing sentence, see Pl. Mem. 25).
compulsion. See id. 211 (citation omitted). that line crossed, the Spending Clause violated.
Preliminarily, note that their complaint the state plaintiffs appear have relied solely coercion and commandeering theory. Nowhere that pleading they allege intimate that the Act also violates the four general restrictions Dole, nor did they make the argument opposition the defendants previous motion dismiss. Thus, stated earlier order after describing Doles four general restrictions: The plaintiffs not appear dispute that the Act meets these restrictions. Rather, their claim based principally [the coercion theory]. Apparently expanding that argument, the state plaintiffs now argue (very briefly, less than one full page) that the Acts Medicaid provisions violate the four general restrictions. See Pl. Mem. 44-45. This belated argument unpersuasive. The Act plainly meets the first three Doles spending restrictions, and meets the fourth long there other required activity that would independently unconstitutional. Thus, the only real issue with respect Count IV, framed the pleadings, whether the Medicaid provisions are impermissibly coercive and effectively commandeer the states.
The gist this claim that because Medicaid the single largest federal grant-in-aid program the states, and because the states and the needy persons receiving that aid have come depend upon it, the state plaintiffs are faced with untenable Hobsons Choice. They must either (1) accept the Acts transformed Medicaid program with its new costs and obligations, which they cannot afford,
(2) exit the program altogether and lose the federal matching funds that are necessary and essential provide health care coverage their neediest citizens (along with other Medicaid-linked federal funds). Either way, they contend that their state Medicaid systems will eventually collapse, leaving millions their neediest residents without health care. The state plaintiffs assert that they effectively have choice other than participate the program. their voluminous materials filed support their motion for summary judgment, the state plaintiffs have identified some serious financial and practical problems that they are facing under the Act, especially its costs. They present bleak fiscal picture. the same time, much those facts have been disputed the defendants their equally voluminous filings; and also some the states appearing the case amici curiae, who have asserted that the Act will the long run save money for the states. simply impossible resolve this factual dispute now both sides financial data are based economic assumptions, estimates, and projections many years out. short, there are numerous genuine disputed issues material fact with respect this claim that cannot resolved summary judgment.6 However, even looking beyond these presently impossibleto-resolve disputed issues fact, there simply support for the state plaintiffs coercion argument existing case law. considering this issue the motion dismiss stage, noted that state Perhaps anticipating this, the state plaintiffs maintained response the defendants filings that the entire question whether the States costs might some extent offset collateral savings legally irrelevant. See Pl. Opp. 29. Thus, even the States were projected achieve collateral savings, those savings would way lessen the coercion and commandeering which Plaintiff States complain, because they would still required Congresss bidding. Id. 41-42. However, would appear from the operative complaint that the coercion claim has always been rooted the underlying contention that the Act forces the states expend resources that they cannot afford: Plaintiff States cannot afford the unfunded costs participating under the Act, but effectively have choice other than participate. Second Amended Complaint 84; see also id. (referring the fiscal impact the Medicaid expansion and explaining that will compel states to assume costs they cannot afford); id. (Act will expand eligibility for enrollment beyond the States ability fund its participation); id. (referring the projected billions dollars additional costs stemming from the Medicaid-related portions the Act which will grow succeeding years); id. (referencing the harmful effects the Act [the state] fiscs).
participation the Medicaid program under the Act --- always has been --voluntary. This fundamental binary element: either voluntary, not. While the state plaintiffs insist that their participation involuntary, and that they cannot exit the program, the claim contrary the judicial findings numerous other Medicaid cases [see, e.g., Wilder Virginia Hosp. Assoc., 496 U.S. 498, 502, 110 Ct. 2510, 110 Ed. 455 (1990) (observing that Medicaid cooperative federal-state program [and] participation the program voluntary); Florida Assoc. Rehab. Facilities Florida Dept Health Rehab. Servs, 225 F.3d 1208, 1211 (11th Cir. 2000) (No state obligated participate the Medicaid program.); Doe Chiles, 136 F.3d 709, 722 (11th Cir. 1998) (Medicaid program from which the state always retains [the] option withdraw)], and belied numerous published news reports that several states (including certain the plaintiffs this case) are presently considering doing exactly that. Furthermore, two plaintiff states have acknowledged declarations filed support summary judgment that they can withdraw from the program. See Declaration Michael Willden (Director Department Health and Human Services, Nevada) (Nevada can still consider opting out Medicaid viable option.); Declaration Deborah Bowman (Secretary Department Social Services, South Dakota) (conceding that although would detrimental its Medicaid recipients, South Dakota could cease participation the Medicaid Program). When the freedom opt out the program viewed light the fact that Congress has expressly reserved the right alter amend the Medicaid program [see U.S.C. 1304 (The right alter, amend, repeal any provision this chapter hereby reserved the Congress.)], and has done many times over the years, observed earlier order that the plaintiffs argument was not strong. See Harris McRae, 448 U.S. 297, 301, 100 Ct. 2671, Ed. 784 (1980) (stating that participation the Medicaid program entirely optional, [but] once State elects participate, must comply with the requirements).
Indeed, survey the legal landscape revealed that there was very little support for the plaintiffs coercion theory argument every single federal Court Appeals called upon consider the issue has rejected the coercion theory viable claim. See, e.g., Doe Nebraska, 345 F.3d 593, 599-600 (8th Cir. 2003); Kansas United States, 214 F.3d 1196, 1201-02 (10th Cir. 2000); California United States, 104 F.3d 1086, 1092 (9th Cir. 1997); Oklahoma Schweiker, 655 F.2d 401, 413-14 (D.C. Cir. 1981); State New Hampshire Dept Employment Sec. Marshall, 616 F.2d 240, 246 (1st Cir. 1980); but see West Virginia U.S. Dept Health Human Servs., 289 F.3d 281, 288-90 (4th Cir. 2002) (referring prior decision that court, Commonwealth Virginia Dept Education Riley, 106 F.3d 559 (4th Cir. 1997), where six the thirteen judges banc panel stated dicta that coercion claim may viable that court, but going note that due strong doubts about the viability the coercion theory most courts faced with the question have effectively abandoned any real effort apply the coercion theory after finding, essence, that raises political questions that cannot resolved the courts). the absence Eleventh Circuit case point, the state plaintiffs claim was plausible the motion dismiss stage. Thus, the plaintiffs were allowed proceed and provide evidentiary support and further legal support for judicially manageable standard coherent theory for determining when, the words the Supreme Court, federal spending condition pass[es] the point which pressure turns into compulsion. See Dole, supra, 483 U.S. 211. The evidentiary support substantially dispute, already noted, and further legal support has not been forthcoming. now apparent that existing case law inadequate support the state plaintiffs coercion claim. the Ninth Circuit has explained its analysis earlier coercion claim made the State Nevada: can hardly fault appellant [for not providing the court with any principled definition the word coercion] because our own inquiry has left with only series unanswered questions. Does the relevant inquiry turn how high percentage the total programmatic funds lost when federal aid cut-off? does turn, Nevada claims this case, what percentage the federal share withheld? what percentage the state's total income would required replace those funds? the extent which alternative private, state, federal sources funding are available? There are other interesting and more fundamental questions. For example, should the fact that Nevada, unlike most states, fails impose state income tax its residents play part our analysis? Or, put the question more basically, can sovereign state which always free increase its tax revenues ever coerced the withholding federal funds --- the state merely presented with hard political choices?
Nevada Skinner, 884 F.2d 445, 448 (9th Cir. 1989). not simply matter
these being generally difficult complex questions for courts resolve because, have said, courts deal every day with the difficult complexities applying Constitutional principles set forth and defined the Supreme Court. Rather, Justice Cardozo cautioned what appears have been the first case hint the possibility coercion theory claim, to hold that motive temptation equivalent coercion plunge the law endless difficulties. See Steward Machine Co. Davis, 301 U.S. 548, 589-90, Ct. 883, Ed. 1279 (1937) (emphasis added); see also, e.g., Skinner, supra, 884 F.2d 448 (The difficulty not the impropriety making judicial judgments regarding state's financial capabilities renders the coercion theory highly suspect method for resolving disputes between federal and state governments.). short, while the plaintiffs coercion theory claim was plausible enough survive dismissal, upon full consideration the relevant law and the Constitutional principles involved, and light the numerous disputed facts alluded above, must conclude that this claim cannot succeed and that the defendants are entitled judgment matter law. ruling, join all courts have considered this issue and reached the same result, even factual situations that involved (as here) the potential withdrawal states entire Medicaid grant. See, e.g., Schweiker, supra, 655 F.2d 414 (The courts are not suited evaluating whether the states are faced here with offer they cannot refuse merely hard choice.); California, supra, 104 F.3d 1086 (rejecting coercion theory argument based the claim that while the state joined Medicaid voluntarily, had grown depend federal funds and now has choice but remain the program order prevent collapse its medical system). appreciate the difficult situation which the states find themselves. matter historical fact that the time the Constitution was drafted and ratified, the Founders did not expect that the federal government would able provide sizeable funding the states and, consequently, able exert power over the states the extent that currently does. the contrary, was expected that the federal government would have limited sources tax and tariff revenue, and might have supported the states. This reversal roles makes any state-federal partnership somewhat precarious given the federal governments enormous economic advantage. Some have suggested that, the interest federalism, the Supreme Court should revisit and reconsider its Spending Clause cases. See Lynn Baker, The Spending Power and the Federalist Revival, Chap. Rev. 195-96 (2001) (maintaining the greatest threat state autonomy is, and has long been, Congresss spending power and the states will the mercy Congress long there are meaningful limits its spending power). However, unless and until that happens, the states have little recourse remaining the very junior partner this partnership.
Accordingly, summary judgment must granted favor the defendants Count IV.
II. Individual Mandate (Count One)
For this claim, the plaintiffs contend that the individual mandate exceeds Congress power under the Commerce Clause. date, three district courts have ruled this issue the merits. Two have held that the individual mandate proper exercise the commerce power [Liberty Univ., Inc. Geithner, --- Supp. ---, 2010 4860299 (W.D. Va. Nov. 30, 2010); Thomas More Law Center Obama, 720 Supp. 882 (E.D. Mich. 2010)], while the other court held that violates the Commerce Clause. Virginia Sebelius, 728 Supp. 768 (E.D. Va. 2010). issue here, the other cases decided far, the assertion that the Commerce Clause can only reach individuals and entities engaged activity; and because the plaintiffs maintain that individuals failure purchase health insurance is, almost definition, inactivity, the individual mandate goes beyond the Commere Clause and unconstitutional. The defendants contend that activity not required before Congress can exercise its Commerce Clause power, but that, even required, not having insurance constitutes activity. The defendants also claim that the individual mandate sustainable for the second reason that falls within the Necessary and Proper Clause.7 The Necessary and Proper Clause not really separate inquiry, but rather part and parcel the Commerce Clause analysis augments that enumerated power authorizing Congress To make all Laws which shall necessary and proper regulate interstate commerce. See, e.g., Gonzales Raich, 545 U.S. 22, 125 Ct. 2195, 162 Ed. (2005); see also id. 34-35, (Scalia, J., concurring judgment); accord Garcia Vanguard Car Rental USA, Inc., 540 F.3d 1242, 1249 (11th Cir. 2008) (the Commerce Clause power the combination the Commerce Clause per and the Necessary and Proper Clause). Nevertheless, will consider the two arguments separately for ease analysis, and because that Standing Challenge the Individual Mandate
Before addressing the individual mandate, must first take the issue the plaintiffs standing pursue this claim. previously held the motion dismiss that the individual plaintiffs and NFIB had standing, but the defendants have re-raised the issue summary judgment.8
One the individual plaintiffs, Mary Brown, has filed declaration which she avers, among other things: (i) that she small business owner and member NFIB; (ii) that she does not currently have health insurance and has not had health insurance for the past four years; (iii) that she regularly uses her personal funds meet her business expenses; (iv) that she not eligible for Medicaid Medicare and will not eligible 2014; (v) that she subject the individual mandate and objects being required comply she does not believe the cost health insurance wise acceptable use her resources; (vi) that both she and her business will harmed she required buy health insurance that she neither wants nor needs because will force her divert financial resources from her other priorities, including running her business, and doing will threaten ability maintain own, independent business; (vii) that she would forced reorder her personal and business affairs because, [w]ell advance 2014, must now investigate whether and how both obtain and maintain the required insurance; and lastly, (viii) that she must also now investigate the impact that compliance with the individual mandate will have her priorities and whether she how the defendants have framed and presented their arguments. See Def. Mem. (contending that the individual mandate essential part the regulatory health care reform effort, and thus also valid exercise Congresss authority the provision analyzed under the Necessary and Proper Clause). was not necessary address standing for the Medicaid challenge the defendants did not dispute that the states could pursue that claim.
can maintain her business, whether, instead, she will have lay off employees, close her business, and seek employment that provides qualifying health insurance benefit.
The other individual plaintiff, Kaj Ahlburg, has filed declaration which avers, inter alia: (i) that retired and holds present employment; (ii) that has not had health care insurance for the past six years; (iii) that has desire intention buy health insurance currently, and expects remain, able pay for his and his familys own health care needs; (iv) that not eligible for Medicaid Medicare and will not eligible 2014; (v) that subject the individual mandate and objects being forced comply with does not represent a sensible acceptable use financial resources and will force him to divert funds from other priorities which know more important for myself and family; and (vi) that must now investigate how and whether rearrange his finances to ensure the availability sufficient funds pay for the required insurance premiums.
These declarations are adequate support standing for the reasons set forth and discussed length prior opinion, which need not repeated here any great detail. establish standing challenge statute, plaintiff needs show a realistic danger sustaining direct injury result the statutes operation enforcement [Babbitt United Farm Workers Natl Union, 442 U.S. 289, 298, Ct. 2301, Ed. 895 (1979)]; that pegged sufficiently fixed period time [ACLU Florida, Inc. Miami-Dade County School Bd., 557 F.3d 1177, 1194 (11th Cir. 2009)]; and which not merely hypothetical conjectural [Florida State Conference the NAACP Browning, 522 F.3d 1153, 1161 (11th Cir. 2008)]. The individual plaintiffs, Ms. Brown particular, have established that because the financial expense they will definitively incur under the Act 2014, they are needing take investigatory steps and make financial arrangements now ensure compliance then. That enough show standing, the clear majority district courts consider legal challenges the individual mandate have held. See Goudy-Bachman U.S. Dept Health Human Servs., 2011 223010, *4-*7 (M.D. Pa. Jan. 24, 2011); Liberty Univ., Inc., supra, 2010 4860299, *5-*7; U.S. Citizens Assoc., supra, 2010 4947043, *3; Thomas More Law Center, supra, 720 Supp. 882, 887-89; but see Baldwin Sebelius, 2010 3418436, (S.D. Cal. Aug. 27, 2010) (holding that plaintiff that case lacked standing challenge individual mandate the grounds that 2014 may have secured insurance his own). the District Court for the Eastern District Michigan properly noted Thomas More Law Center case which the defendants heavily rely because ultimately upheld the individual mandate): [T]he government requiring plaintiffs undertake expenditure, for which the government must anticipate that significant financial planning will required. That financial planning must take place well advance the actual purchase insurance 2014 There nothing improbable about the contention that the Individual Mandate causing plaintiffs feel economic pressure today. Thomas
More Law Center, supra, 720 Supp. 889.9
Because the individual plaintiffs have demonstrated standing, including NFIB member Mary Brown, that means (as also discussed earlier order) that NFIB has associational standing well. This leaves the question the state plaintiffs standing contest the individual mandate --- issue which was not necessary reach the motion dismiss, but which the plaintiffs request that address now.
The state plaintiffs have raised several different grounds for standing. One those grounds that some the states have passed legislation seeking protect note that Thomas More Law Center appeal the Sixth Circuit, and their recently-filed appellate brief the Department Justice has expressly declined challenge the district courts conclusion that the plaintiffs had standing.
their citizens from forced compliance with the individual mandate. For example, March 17, 2010, before the Act passed into law, plaintiff Idaho enacted the Idaho Health Freedom Act, which provides pertinent part:
(1)
The power require regulate person's choice the mode securing health care services, impose penalty related thereto, not found the Constitution the United States America, and therefore power reserved the people pursuant the Ninth Amendment, and the several states pursuant the Tenth Amendment. The state Idaho hereby exercises its sovereign power declare the public policy the state Idaho regarding the right all persons residing the state Idaho choosing the mode securing health care services free from the imposition penalties, the threat thereof, the federal government the United States America relating thereto.
(2) hereby declared that every person within the state Idaho and shall free choose decline choose any mode securing health care services without penalty threat penalty the federal government the United States America.
I.C. 39-9003 (2010).
Similarly, March 22, 2010, also before the Act became law, Utah passed legislation declaring that the then-pending federal government proposals for health care reform infringe state powers and infringe the rights citizens this state provide for their own health care requiring person enroll third party payment system and imposing fines person who chooses pay directly for health care rather than use third party payer. See generally U.C.A. 1953 63M-1-2505.5.
Judge Henry Hudson considered similar legislation one the two Virginia cases. After engaging lengthy analysis and full discussion the applicable law [see generally Virginia Sebelius, 702 Supp. 598, 602-07 (E.D. Va. 2010)], concluded that despite the statutes declaratory nature, the Commonwealth had adequate standing bring the suit insofar [t]he mere existence the lawfully-enacted statue sufficient trigger the duty the Attorney General Virginia defend the law and the associated sovereign power enact it. See id. 605-06. agree with Judge Hudsons thoughtful analysis the issue and adopt here. The States Idaho and Utah, through plaintiff Attorneys General Lawrence Wasden and Mark Shurtleff, have standing prosecute this case based statutes duly
passed their legislatures, and signed into law their Governors.10 sum, the two individual plaintiffs (Brown and Ahlburg), the association (NFIB), and least two the states (Idaho and Utah) have standing challenge the individual mandate. This eliminates the need discuss the standing issue with respect the other state plaintiffs, the other asserted bases for standing. See Watt Energy Action Educ. Found., 454 U.S. 151, 160, 102 Ct. 205, Ed. 309 (1981) (Because find California has standing, not consider the standing the other plaintiffs.); Village Arlington Heights Metropolitan Housing Dev. Corp., 429 U.S. 252, 264 n.9, Ct. 555, Ed. 450 (1977) (Because the presence this plaintiff, need not consider whether the other individual and corporate plaintiffs have standing maintain this suit.); see also Mountain States Legal Foundation Glickman, F.3d 1228, 1232 (D.C. Cir. 1996) (if standing shown for least one plaintiff with respect each claim, we need not consider the standing the other plaintiffs raise that claim).
Having reaffirmed that the plaintiffs have adequate standing challenge the individual mandate, will consider whether that provision appropriate exercise power under the Commerce Clause, and, not, whether sustainable under note that several other plaintiff states passed similar laws after the Act became law and during the pendency this litigation. Other states have similar laws still pending their state legislatures.
the Necessary and Proper Clause. The Constitutionality the individual mandate the crux this entire case. Analysis
(1) The Commerce Clause
The current state Commerce Clause law has been summarized and defined the Supreme Court several occasions:
[W]e have identified three broad categories activity that Congress may regulate under its commerce power. First, Congress may regulate the use the channels interstate commerce. Second, Congress empowered regulate and protect the instrumentalities interstate commerce, persons things interstate commerce, even though the threat may come only from intrastate activities. Finally, Congress commerce authority includes the power regulate those activities having substantial relation interstate commerce, i.e., those activities that substantially affect interstate commerce.
United States Lopez, 514 U.S. 549, 558-59, 115 Ct. 1624, 131 Ed.
626 (1995) (citations omitted); accord United States Morrison, 529 U.S. 598,
608-09, 120 Ct. 1740, 146 Ed. 658 (2000); see also Hodel Virginia
Surface Min. Reclamation Assoc., Inc., 452 U.S. 264, 276-77, 101 Ct. 2352, Ed. (1981); Perez United States, 402 U.S. 146, 150, Ct. 1357, Ed. 686 (1971). thus well settled that Congress has the authority
under the Commerce Clause regulate three --- and only three --- categories
activity. Lopez, supra, 514 U.S. 558; see also, e.g., Garcia Vanguard Car
Rental USA, Inc., 540 F.3d 1242, 1249-51 (11th Cir. 2008) (discussing detail
the three categories activities that Congress can regulate); United States
Maxwell, 446 F.3d 1210, 1212 (11th Cir. 2006) (noting that, to date, Congress
can regulate only three categories activities). The third category the one
issue this case. will seen, the substantially affects category the most frequently
disputed and most hotly contested facet the commerce power. Garcia, supra,
540 F.3d 1250. This because, while under the first two categories Congress
may regulate and protect actual interstate commerce,
the third allows Congress regulate intrastate noncommercial activity, based its effects. Consideration effects necessarily involves matters degree [and] thus poses not two hazards, like Scylla and Charybdis, but three. entertain too expansive understanding effects, the Constitutions enumeration powers becomes meaningless and federal power becomes effectively limitless. entertain too narrow understanding, Congress stripped its enumerated power, reinforced the Necessary and Proper Clause, protect and control commerce among the several states. employ too nebulous standard, exacerbate the risk that judges will substitute their own subjective political calculus for that the elected representatives the people, will appear doing so.
United States Patton, 451 F.3d 615, 622-23 (10th Cir. 2006). Before attempting navigate among these three hazards, full review the historical roots the
commerce power, and discussion how got where are today, may
instructive.
(a) The Commerce Clause its Historical Context
Chief Justice Marshall wrote 1824, the first ever Commerce Clause
case reach the Supreme Court: men, whose intentions require concealment, generally employ the words which most directly and aptly express the ideas they intend convey, the enlightened patriots who framed our constitution, and the people who adopted it, must understood have employed words their natural sense, and have intended what they have said.
Gibbons Ogden, U.S. Wheat.) 188, Ed. (1824). Justice Marshall continued his opinion noting that if, from the imperfection human language, there are doubts the extent any power authorized under the Constitution, the underlying object purpose for which that power was granted should have great influence the construction. Id. 188-89. other words, determining the full extent any granted power, may helpful not only focus what the Constitution says (i.e., the actual language used), but also why says what says (i.e., the problem issue was designed address). Both will discussed turn.
The Commerce Clause mere sixteen words long, and provides that Congress shall have the power: regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes.
U.S. Const. art cl. For purposes this case, only seven words are relevant: To regulate Commerce among the several States. There considerable historical evidence that the early years the Union, the word commerce was understood encompass trade, and the intercourse, traffic, exchange goods; short, the activities buying and selling that come after production and before the goods come rest. Robert Bork Daniel Troy, Locating the Boundaries: The Scope Congresss Power Regulate Commerce, Harv. Pub. Poly 849, 861-62 (2002) (Bork Troy) (citing, inter alia, dictionaries from that time which defined commerce exchange one thing for another). frequently cited law review article, one Constitutional scholar has painstakingly tallied each appearance the word commerce Madisons notes the Constitutional Convention and The Federalist, and discovered that none the ninety-seven appearances that term ever used refer unambiguously activity beyond trade exchange. See Randy Barnett, The Original Meaning the Commerce Clause, Chi. Rev. 101, 114-16 (2001) (Barnett); see also id. 116 (further examining each and every use the word that appeared the state ratification convention reports and finding the term was uniformly used refer trade exchange). Even Constitutional scholar who has argued for expansive interpretation the Commerce Clause (and, fact, has been cited to, and relied on, the defendants this case) has acknowledged that when the Constitution was drafted and ratified, commerce was the practical equivalent the word trade. See Robert Stern, That Commerce Which Concerns More States than One, Harv. Rev. 1335, 1346 (1934) (Stern).
The Supreme Courts first description commerce (and still the most widely accepted) from Gibbons Ogden, supra, which involved New York law that sought limit the navigable waters within the jurisdiction that state. holding that commerce comprehended navigation, and thus fell within the reach the Commerce Clause, Chief Justice Marshall explained that Commerce, undoubtedly, traffic, but something more: intercourse. describes the commercial intercourse between nations, and parts nations, all its branches, and regulated prescribing rules for carrying that intercourse. U.S. 72. This definition consistent with accepted dictionary definitions the Founders time. See Samuel Johnson, Dictionary the English Language (4th ed. 1773) (commerce defined Intercourse; exchange one thing for another; interchange any thing; trade; traffick). And remained good definition the Supreme Courts Commerce Clause interpretation throughout the Nineteenth Century. See, e.g., Kidd Pearson, 128 U.S. 20-21, Ct. Ed. 346 (1888) (The legal definition the term [commerce] consists intercourse and traffic, including these terms navigation and the transportation and transit persons and property, well the purchase, sale, and exchange commodities). Alexander Hamilton intimated The Federalist, however, did not that time encompass manufacturing agriculture. See The Federalist No. 34, 212-13 (noting that the encouragement agriculture and manufactures was remain object state expenditure). This interpretation commerce being primarily concerned with the commercial intercourse associated with the trade exchange goods and commodities consistent with the original purpose the Commerce Clause (discussed immediately below), which entitled great influence [its]
construction. See Gibbons, supra, U.S. 188-89.11
There doubt historically that the primary purpose behind the Commerce Clause was give Congress power regulate commerce that could eliminate the trade restrictions and barriers and between the states that had existed under the Articles Confederation. Such obstructions commerce were destructive the Union and believed precursors war. The Supreme Court has explained this rationale:
When victory relieved the Colonies from the pressure for solidarity that war had exerted, drift toward anarchy historical aside, note that pursuant this original understanding and interpretation commerce, insurance contracts did not qualify because [i]ssuing policy insurance not transaction commerce. Paul Virginia, U.S. Wall.) 168, 183, Ed. 357 (1868) (further explaining that insurance contracts are not articles commerce any proper meaning the word they are not objects of trade and barter, nor are they commodities shipped forwarded from one State another, and then put for sale). That changed 1944, when the Supreme Court held that Congress could regulate the insurance business under the Commerce Clause. United States South-Eastern Underwriters Assoc., 322 U.S. 533, Ct. 1162, Ed. 1440 (1944). Concerned that [this] decision might undermine state efforts regulate insurance, Congress 1945 enacted the McCarran-Ferguson Act. Section the Act provides that continued regulation and taxation the several States the business insurance the public interest, and that silence the part the Congress shall not construed impose any barrier the regulation taxation such business the several States. Humana Inc. Forsyth, 525 U.S. 299, 306, 119 Ct. 710, 142 Ed.2d 753 (1999) (quoting U.S.C. 1011). Thus, ever since passage the McCarran-Ferguson Act, the insurance business has continued regulated almost exclusively the states.
and commercial warfare between states began [E]ach state would legislate according its estimate its own interests, the importance its own products, and the local advantages disadvantages its position political commercial view. This came threaten once the peace and safety the Union. The sole purpose for which Virginia initiated the movement which ultimately produced the Constitution was take into consideration the trade the United States; examine the relative situations and trade the said states; consider how far uniform system their commercial regulation may necessary their common interest and their permanent harmony and for that purpose the General Assembly Virginia January 1786 named commissioners and proposed their meeting with those from other states.
The desire the Forefathers federalize regulation foreign and interstate commerce stands sharp contrast their jealous preservation power over their internal affairs. other federal power was universally assumed necessary, other state power was readily relin[q]uished. There was desire authorize federal interference with social conditions legal institutions the states. Even the Bill Rights amendments were framed only limitation upon the powers Congress. The states were quite content with their several and diverse controls over most matters but, Madison has indicated, want general power over Commerce led exercise this power separately, the States, which not only proved abortive, but engendered rival, conflicting and angry regulations.
H.P. Hood Sons, Inc. Mond, 336 U.S. 525, 533-34, Ct. 657, Ed. 865 (1949) (citations and quotations omitted). The foregoing frequently repeated history lesson from the Supreme Court. his concurring opinion the landmark 1824 case Gibbons Ogden, supra, for example, Justice Johnson provided similar historical summary:
For century the States [as British colonies] had submitted, with murmurs, the commercial restrictions imposed the parent State; and now, finding themselves the unlimited possession those powers over their own commerce, which they had long been deprived of, and earnestly coveted, that selfish principle which, well controlled, salutary, and which, unrestricted, unjust and tyrannical, guided inexperience and jealousy, began show itself iniquitous laws and impolitic measures, from which grew conflict commercial regulations, destructive the harmony the States, and fatal their commercial interests abroad.
This was the immediate cause, that led the forming convention. Gibbons, supra, U.S. 224. the Supreme Courts 1888 decision Kidd Pearson, Justice Lamar noted that it matter public history that the object vesting congress the power regulate commerce among the several states was insure uniformity for regulation against conflicting and discriminatory state legislation. See Kidd, supra, 128 U.S. 21. More recently, Justice Stevens has advised that when construing the scope the power granted Congress the Commerce Clause [i]t important remember that this clause was the Framers response the central problem that gave rise the Constitution itself, that is, the Founders had set out only find way reduce trade restrictions. See EEOC Wyoming, 460 U.S. 226, 244-45, 103 Ct. 1054, Ed. (1983) (Stevens, J., concurring). The foregoing history widely shared, [see id. 245 n.1], that Constitutional scholars with opposing views the Commerce Clause readily agree this point. Compare Stern, supra, 1344 (There can question, course, that 1787 [when] the framers and ratifiers the Constitution considered the need for regulating commerce with foreign nations and among the several states, they were thinking only terms the removal barriers obstructing the physical movements goods across state lines.), with Bork Troy, supra, 858, 865 (One thing certain: the Founders turned federal commerce power carve stability out this commercial anarchy and keep the States from treating one another hostile foreign powers; short, the Clause was drafted grant Congress the power craft coherent national trade policy, restore and maintain viable trade among the states, and prevent interstate war.). Hamilton and Madison both shared this concern that conflicting and discriminatory state trade legislation would naturally lead outrages, and these reprisals and wars. The Federalist No. (Hamilton); see also The Federalist No. 42, 282 (Madison) (referencing the unceasing animosities and serious interruptions the public tranquility that would inevitably flow from the lack national commerce power). acknowledge the foregoing historical facts not necessarily say that the power under the Commerce Clause was intended (and must) remain limited the trade exchange goods, and confined the task eliminating trade barriers erected and between the states.12 The drafters the Constitution were aware that they were preparing instrument for the ages, not one suited only for the exigencies that particular time. See, e.g., McCulloch, supra, U.S. 415 (the Constitution was intended endure for ages come and to adapted the various crises human affairs) (Marshall, C.J.); Weems United States, 217
U.S. 349, 373, Ct. 544, Ed. 793 (1910) (explaining that constitutions Although there some evidence that exactly what Madison, least, had intended. one his letters, wrote that the Commerce Clause grew out the abuse the power the importing States taxing the non-importing, and was intended negative and preventive provision against injustice among the States themselves, rather than power used for the positive purposes the General Government. West Lynn Creamery, Inc. Healy, 512 U.S. 186, 193 n.9, 114 Ct. 2205, 129 Ed. 157 (1994) (quoting Farrand, Records the Federal Convention 1787, 478 (1911)).
are not ephemeral enactments, designed meet passing occasions, but rather are designed approach immortality nearly human institutions can approach [and], therefore, our contemplation cannot only what has been, but what may be); accord New York United States, 505 U.S. 144, 157, 112 Ct. 2408, 120 Ed. 120 (1992) (the Constitution was phrased language broad enough allow for the expansion federal power and allow enormous changes the nature government). Hamilton explained:
Constitutions civil government are not framed upon calculation existing exigencies, but upon combination these with the probable exigencies ages, according the natural and tried course human affairs. Nothing, therefore, can more fallacious than infer the extent any power, proper lodged the national government, from estimate its immediate necessities. There ought capacity provide for future contingencies they may happen; and these are illimitable their nature, impossible safely limit that capacity.
The Federalist No. 34, 210-11 (emphasis original).
Thus, the exercise and interpretation the commerce power has evolved and undergone significant change as the needs dynamic and constantly expanding national economy have changed. See EEOC, supra, 460 U.S. 246 (Stevens, J., concurring). But, will begin the beginning.
(b) Evolution Commerce Clause Jurisprudence
Some have maintained that the Commerce Clause power began as, and was intended remain, narrow and limited one. See, e.g., Raoul Berger, Federalism: The Founders Design (1987) (arguing that the founders sought create limited federal government whose power, including the commerce power, was narrow scope); Barnett, supra, 146 (concluding that the most persuasive evidence original meaning strongly supports [the] narrow interpretation Congresss power [under the Commerce Clause]). Despite evidence support this position, difficult prove decisively because for the first century our history the Clause
was seldom invoked Congress (if all), and then only negatively prevent the
interference with commerce individual states. This necessarily means that there lack early congressional and judicial pronouncements the subject. This,
turn, makes harder conclusively determine how far the commerce power was
originally intended reach. was not until 1824 (more than three decades after
ratification) that the Supreme Court was first called upon Gibbons Ogden
consider the commerce power. that time, would appear that the Clause was
given rather expansive treatment Chief Justice Marshall, who wrote:
[The commerce power] the power regulate; that is, prescribe the rule which commerce governed. This power, like all others vested Congress, complete itself, may exercised its utmost extent, and acknowledges limitations, other than are prescribed the constitution If, has always been understood, the sovereignty Congress, though limited specified objects, plenary those objects, the power over commerce with foreign nations, and among the several States, vested Congress absolutely would single government, having its constitution the same restrictions the exercise the power are found the constitution the United States. The wisdom and the discretion Congress, their identity with the people, and the influence which their constituents possess elections, are, this, many other instances the sole restraints which they have relied, secure them from its abuse.
Gibbons, supra, U.S. 75. Notwithstanding this seemingly broad interpretation Congress power negate New Yorks assertion authority over its navigable
waters, was not until 1887, one hundred years after ratification, that Congress
first exercised its power affirmatively and positively regulate commerce among
the states. And when did, the Supreme Court that time rejected the broad conception commerce and the power Congress regulate the economy was sharply restricted. See, e.g., Kidd Pearson, supra (1888). Thus, for most the first century and half Constitutional government (with the possible exception Gibbons Ogden 1824), the Clause was narrowly construed and given miserly construction. See EEOC, supra, 460 U.S. 246 (Stevens, J., concurring) (citing Kidd, supra, 128 U.S. 20-21 (manufacturing not subject the commerce power Congress); United States E.C. Knight Co., 156 U.S. 12-16, Ct. 249, Ed. 325 (1895) (manufacturing monopoly not subject commerce power); Adair United States, 208 U.S. 161, 178-179, Ct. 277, Ed. 436 (1908) (connection between interstate commerce and membership labor union insufficient authorize Congress make crime for interstate carrier fire employee for his union membership); Hammer Dagenhart, 247 U.S. 251, 276, Ct. 529, Ed. 1101 (1918) (Congress without power prohibit the interstate transportation goods produced with child labor); Carter Carter Coal Co., 298 U.S. 238, 298, 308-10, Ct. 855, Ed. 1160 (1936) (holding that commerce power does not extend the regulation wages, hours, and working conditions coal miners; defining commerce --- consistent with the original understanding the term --- the equivalent the phrase intercourse for the purposes trade)).
For example, A.L.A. Schechter Poultry Corp. United States, 295 U.S. 495, Ct. 837, Ed. 1570 (1935), case well known first year law students, the Court invalidated regulations fixing employee hours and wages intrastate business because the activity being regulated only related interstate commerce indirectly. The Supreme Court characterized the distinction between direct and indirect effects interstate commerce a fundamental one, essential the maintenance our constitutional system, for without there would virtually limit the federal power and for all practical purposes should have completely centralized government. Id. 548.
But, everything changed 1937, beginning with the first three significant New Deal cases. N.L.R.B. Jones Laughlin Steel Corp., 301 U.S. Ct. 615, Ed. 893 (1937), the Supreme Court, after recognizing the well known principle that acts which directly burden obstruct interstate foreign commerce, its free flow, are within the reach the congressional power [see id. 31], held for the first time that Congress could also regulate purely intrastate activities that could said have substantial effect interstate commerce. Although activities may intrastate character when separately considered, they have such close and substantial relation interstate commerce that their control essential appropriate protect that commerce from burdens and obstructions, Congress cannot denied the power exercise that control. Id.
37. The question was now the effect upon interstate commerce the [intrastate
activity] involved. Id. (emphasis added). Four years later, United States Darby, 312 U.S. 100, Ct. 451, Ed. 609 (1941), the Supreme Court overruled Hammer Dagenhart, supra. upholding the wage and hour requirements the Fair Labor Standards Act, and its suppression substandard labor conditions, the Court reaffirmed that with respect intrastate transactions and activities having substantial effect interstate commerce, Congress may regulate them without doing violence the Constitution. See id. 118-23.
And then came Wickard Filburn, 317 U.S. 111, Ct. 82, Ed. 122 (1942), which, until recently, was widely considered the most far-reaching expansion Commerce Clause regulatory authority over intrastate activity. issue Wickard were amendments the Agricultural Adjustment Act 1938 that set acreage allotments for wheat farmers effort control supply and avoid surpluses that could result abnormally low wheat prices. The plaintiff that case, Roscoe Filburn, owned small farm which raised and harvested wheat, among other things. When exceeded his allotment acres (which yielded 239 bushels wheat), was penalized under the statute. Although the intended disposition the crop involved the case was not expressly stated, [id. 114], the Supreme Court assumed and analyzed the issue though the excess wheat was not intended any part for commerce but wholly for consumption the farm. See id. 118. Even though production such wheat may not regarded commerce the strictest sense the word, [see id. 125], consumption the farm satisfied needs that would (theoretically, least) otherwise filled another purchase commercial transaction. See id. 128 (explaining that homegrown wheat supplies need the man who grew which would otherwise reflected purchases the open market [and] this sense competes with wheat commerce). holding that Congress had power under the Commerce Clause regulate production intended for personal consumption, the Supreme Court stated:
[E]ven appellees activity local and though may not regarded commerce, may still, whatever its nature, reached Congress exerts substantial economic effect interstate commerce and this irrespective whether such effect what might some earlier time have been defined direct indirect.
That appellees own contribution the demand for wheat may trivial itself not enough remove him from the scope federal regulation where, here, his contribution, taken together with that many others similarly situated, far from trivial.
Id. 125, 127-28. The latter statement commonly known and described the
aggregation principle. allows Congress under the Commerce Clause reach class activities that have substantial impact interstate commerce when those activities are aggregated with all similar and related activities --- even though the activities within the class may themselves trivial and insignificant. See, e.g., Maryland Wirtz, 392 U.S. 183, 192-93, 196 n.27, Ct. 2017, Ed. 1020 (1968) (any claim that reviewing courts have the power excise, trivial, individual activity within broader class activities has been put entirely rest the de minimis character individual instances arising under [the] statute consequence). illustrate this principle, applied Wickard, even though Filburns 239 bushels were presumably for his own consumption and seed, and did not significantly impact interstate commerce, every farmer the country did the same thing, the aggregate impact commerce would cumulatively substantial.
Together, Jones Laughlin Steel, Darby, and Wickard either ushered in new era Commerce Clause jurisprudence that greatly expanded the previously defined authority Congress under that Clause [Lopez, supra, 514 U.S. 556], they merely restored the broader view the Commerce Clause announced Chief Justice Marshall. Perez, supra, 402 U.S. 151. Regardless whether the cases represented new era simply restoration the old, seemed that from that point forward congressional action under the Commerce Clause was given virtually insurmountable deference. See Kenneth Klukowski, Citizen Gun Rights: Incorporating the Second Amendment Through the Privileges Immunities Clause, N.M. Rev. 195, 232-33 (2009) (noting that these New Deal cases the Court read the Commerce Clause broadly that bold statement say that the provision even nominally constrained federal action). And, indeed, from the New Deal period through the next five decades, not single federal legislative enactment was struck down exceeding Congress power under the Commerce Clause power --- until Lopez 1995. United States Lopez the Supreme Court considered the Constitutionality the Gun Free School Zones Act 1990, which criminalized the possession firearm school zone. holding that the statute exceeded Congress authority under the Commerce Clause, the Supreme Court began recognizing the first principles behind the limitations federal power set forth the Constitution. See supra, 514 U.S. 552. Then, after detailing the history and transformation Commerce Clause jurisprudence --- from Gibbons, A.L.A. Schechter Poultry, and through Wickard --- the Court observed that even cases which had interpreted the Commerce Clause more expansively, every decision date had recognized that the power granted the Clause necessarily subject outer limits which, not recognized and respected, could lead federal action that would effectually obliterate the distinction between what national and what local and create completely centralized government. See generally id. 553-57. Consistent with those limits, the Lopez Court stated we have identified three broad categories activity that Congress may regulate under its commerce power. See id. 558 (emphasis added). The substantially affects category was the one issue there, and holding that the statute did not pass muster thereunder, the Supreme Court focused four considerations: (i) the activity being regulated (guns near schools) was not economic nature; (ii) the statute did not contain jurisdictionally limiting language; (iii) Congress did not make any formal findings concerning the effect the regulated activity commerce; and (iv) the connection between that activity and its effect commerce was attenuated. See generally id. 559-67. for the fourth consideration, the Court impliedly conceded the claims the government and the dissent that: (1) gun-related violence serious national problem with substantial costs that are spread throughout the population; (2) such violence has adverse effects classroom learning (which can result decreased productivity) and discourages traveling into areas felt unsafe; all which, turn, (3) represents substantial threat interstate commerce. The Lopez majority made point pause consider the implications such arguments, however. See id. 563-65. found that such theories were sufficient justify regulation under the Commerce clause (even though their underlying logic and truth were not questioned), it difficult perceive any limitation federal power and we are hard pressed posit any activity individual that Congress without power regulate. See id. 564. accept such arguments and uphold the statute, the majority concluded, would require the Court: pile inference upon inference manner that would bid fair convert congressional authority under the Commerce Clause general police power the sort retained the States. Admittedly, some our prior cases have taken long steps down that road, giving great deference congressional action. The broad language these opinions has suggested the possibility additional expansion, but decline here proceed any further. would require conclude that the Constitution's enumeration powers does not presuppose something not enumerated, and that there never will distinction between what truly national and what truly local. This are unwilling do.
Id. 567-68; see also id. 578, 580 (explaining that the Courts duty recognize meaningful limits the commerce power and intervene Congress has tipped the scales too far federal balance is too essential part our constitutional structure and plays too vital role securing freedom) (Kennedy, J., concurring)
The next significant Commerce Clause case decided the Supreme Court was the 2000 case United States Morrison, supra, 529 U.S. 598, which involved challenge the Violence Against Women Act 1994. The government argued that case --- similar what did Lopez --- that Congress could regulate gender-motivated violence based syllogistic theory that victims such violence are deterred from traveling and engaging interstate business employment; they are thus less productive (and incur increased medical and other costs); all which, turn, substantially affects interstate commerce. See id.
615. The Court began its analysis recognizing the foundational principle that the power the federal government defined and limited and therefore: Every law enacted Congress must based one more its powers enumerated the Constitution. See id. 607. emphasized that while the legal analysis the Commerce Clause has changed our Nation has developed, which has resulted Congress having considerably greater latitude regulating conduct and transactions under the Commerce Clause than our previous case law permitted, authority under the Clause is not without effective bounds. See id. 607-08. The Court then looked the four significant considerations that were identified Lopez and found that, [w]ith these principles underlying our Commerce Clause jurisprudence reference points, the proper resolution the present cases clear. See id. 610-13. First, the statute issue Morrison did not regulate economic activity:
Gender-motivated crimes violence are not, any sense the phrase, economic activity. While need not adopt categorical rule against aggregating the effects any noneconomic activity order decide these cases, thus far our Nation's history our cases have upheld Commerce Clause regulation intrastate activity only where that activity economic nature.
Id. 613. Further, the statute did not contain jurisdictionally limiting language; and while was supported, contrast Lopez, with numerous congressional findings regarding the personal, familial, and economic impact gender-motivated violence, those findings were insufficient sustain the legislation they relied the same method reasoning that have already rejected unworkable are maintain the Constitutions enumeration powers. Id. 615. other words, would require the Court to pile inference upon inference, and, the process, run the risk completely obliterat[ing] the Constitutions distinction between national and local authority. See id. light the circumscriptial rulings Lopez and Morrison, many were surprised the Supreme Courts subsequent decision Gonzales Raich, 545
U.S. 125 Ct. 2195, 162 Ed. (2005), which was not only seen return the more expansive Commerce Clause jurisprudence [see, e.g., Matthew Farley, Challenging Supremacy: Virginias Response the Patient Protection and Affordable Care Act, Rich. Rev. 37, (2010)], but was, fact, viewed some even going beyond and displacing Wickard the most far-reaching all Commerce Clause cases. See Douglas Kmiec, Gonzales Raich: Wickard
Filburn Displaced, 2005 Cato Sup. Ct. Rev. (2005). issue Raich was whether Congress had authority under the Commerce and Necessary and Proper Clauses prohibit, via the Controlled Substances Act, the local cultivation and use marijuana compliance with California law. See Raich, supra, 545 U.S. The marijuana issue, which was being used two seriously ill women for medicinal purposes pursuant state law, had been neither bought nor sold and never crossed state lines. was, and is, illegal most states, and does not have legal free market interstate commerce, the normal attribute any economic analysis. Nevertheless, the Supreme Court began its analysis stating: Our case law firmly establishes Congress power regulate purely local activities that are part economic class activities that have substantial effect interstate commerce. Id. 17. The Court found Wickard striking similarity and of particular relevance the analysis that case establishes that Congress can regulate purely intrastate activity that not itself commercial, that not produced for sale, concludes that failure regulate that class activity would undercut regulation the interstate market that commodity. Id. 17-18. The Court held that Congress had rational basis for finding that leaving home-consumed marijuana outside federal control would affect the price and market conditions for that commodity because, was noted Wickard, the production the commodity meant for home consumption, wheat marijuana, has substantial effect supply and demand the national market for that commodity. See id. 19. Surprisingly, [t]hat the market Raich happened illegal one did not affect the Courts analysis the least. Maxwell, supra, 446 F.3d 1214.
The Eleventh Circuit has indicated that the distinguishing feature between Raich and Wickard the one hand, and Morrison and Lopez the other, was the comprehensiveness the economic component the regulation. Maxwell, supra, 446 F.3d 1214. The statute Lopez, for example, was brief, single-subject criminal statute that did not regulate any economic activity. contrast, the statute Raich was broader legislative scheme at the opposite end the regulatory spectrum. Supra, 545 U.S. 24. was a lengthy and detailed statute creating comprehensive framework for regulating the production, distribution, and possession [controlled substances], which were activities the Supreme Court determined quintessentially economic nature. See id. 24-25. The Court reached this conclusion quite broadly defin[ing] economics the production, distribution, and consumption commodities. See Maxwell, supra, 446 F.3d 1215 n.4 (quoting Raich, supra, 545 U.S. 25-26, turn quoting Websters Third New International Dictionary 720 (1966)).13
(c) Application the Foregoing the Facts this Case
Unsurprisingly, the plaintiffs rely heavily Lopez and Morrison framing objecting the majoritys use this broadest possible definition, Justice Thomas argued dissent that economics not defined broadly other dictionaries, and the majority does not explain why selects remarkably expansive 40-year-old definition. Raich, supra, 545 U.S. and n.7 (Thomas, J., dissenting).
their arguments, while the defendants, course, look principally Wickard and Raich. These cases (along with the others discussed above) all have something add the discussion. However, while they frame the analysis, and are important from historical perspective, they not themselves resolve this case. That because, Congress attorneys the Congressional Research Service (CRS) and Congressional Budget Office (CBO) advised long before the Act was passed into law, the notion Congress having the power under the Commerce Clause directly impose individual mandate purchase health care insurance novel and unprecedented. See Jennifer Staman Cynthia Brougher, Congressional Research Service, Requiring Individuals Obtain Health Insurance: Constitutional Analysis, July 24, 2009, (whether Congress can use its Commerce Clause authority require person buy good service raises novel issue and most challenging question) (CRS Analysis); Congressional Budget Office Memorandum, The Budgetary Treatment Individual Mandate Buy Health Insurance, August 1994 (A mandate requiring all individuals purchase health insurance would unprecedented form federal action.) (CBO Analysis). Never before has Congress required that everyone buy product from private
company (essentially for life) just for being alive and residing the United States.14 The individual mandate differs from the regulations Wickard and Raich, for example, that the individuals being regulated those cases were engaged activity (regardless whether could readily deemed interstate commerce itself) and each had the choice discontinue that activity and avoid penalty. See, e.g., Wickard Filburn, 317 U.S. 111, 130, Ct. 82, Ed. 122 (1942) (noting Congress gave the farmer choice several options under the statute). Here, people have choice but buy insurance penalized. And their freedom actually more restricted they not even have choice the minimum level type insurance buy because Congress established the floor. single twenty-year old man woman who only needs and wants major medical catastrophic coverage, for example, precluded from buying such policy under the Act. explained earlier order, the fact that legislation unprecedented does not itself render unconstitutional. the contrary, all federal legislation carries with presumption constitutionality. Morrison, supra, 529 U.S.
607. However, the presumption arguably weakened, and absence power might reasonably inferred where --- here --- earlier Congresses avoided use this highly attractive power. Printz United States, 521 U.S. 898, 905, 908, 117 Ct. 2365, 138 Ed. 914 (1997); id. 907-08 (the utter lack statutes imposing obligations [like the one issue that case] (notwithstanding the attractiveness that course Congress), suggests assumed absence such power) (emphasis original); id. 918 (almost two centuries apparent congressional avoidance the practice [at issue] tends negate the existence
the congressional power asserted here).15 The mere fact that the defendants have
tried analogize the individual mandate things like jury service, participation the census, eminent domain proceedings, forced exchange gold bullion for paper currency under the Gold Clause Cases, and required service posse under the Judiciary Act 1789 (all which are obviously distinguishable) only underscores and highlights its unprecedented nature.
However, unprecedented not, will assume that the individual mandate can Constitutional under the Commerce Clause and will analyze accordingly. This analysis requires the resolution two essential questions.
(i) Activity Required Under the Commerce Clause?
The threshold question that must addressed whether activity required before Congress can exercise its power under the Commerce Clause. previously Indeed, the plaintiffs have persuasively noted, not even the context insurance under the National Flood Insurance Program did Congress mandate that all homeowners buy flood insurance directly from private company. See Pl. Opp. 26-27.
discussed, Commerce Clause jurisprudence has taken some turns, [see Lopez, supra, 514 U.S. 579 (Kennedy, J., concurring)], and contracted and expanded (and contracted and expanded again) during our nations development. But, every one the cases --- both the contractive and expansive --- there has always been clear and inarguable activity, from exerting control over and using navigable waters
(Gibbons) growing consuming marijuana (Raich).16 all the cases discussed
above, the Supreme Court was called upon decide different issues (e.g., whether commerce encompassed navigation; whether included manufacture and agriculture was limited trade exchange goods; whether the activity issue was interstate intrastate and had direct indirect effect commerce; whether that effect was substantial; whether the activity was economic noneconomic; and whether was part single-subject statute necessary and essential component broader comprehensive scheme), but has never been called upon consider activity required. this point least, the district courts that have reached opposite conclusions the individual mandate agree. Compare Thomas More Law Center, supra, 720 Supp. 893 (noting that the Supreme Court has never needed address the activity/inactivity distinction advanced plaintiffs because every Commerce Clause case presented thus far, there has been some sort activity; then proceeding uphold the individual mandate), with Virginia, supra, 728 Supp. 781 (noting that every application Commerce Clause power found constitutionally sound the The defendants cite Raich for the proposition that Congress may reach even wholly intrastate, non-commercial matters when concludes that the failure would undercut larger program regulating interstate commerce. See Def. Mem. 13. paraphrasing Raich here rather than quoting from the decision the defendants have attempted obscure the importance activity, for the cited portion, and Justice Scalias concurrence (on which the defendants also rely), not talk all matters --- either commercial not. They only mention (and often) activities.
Supreme Court involved some form action, transaction, deed placed motion individual legal entity; then proceeding strike down the individual mandate).
The defendants contend, however, that despite the inarguable presence activity every Supreme Court case date, activity not required under the Commerce Clause. See Def. Mem. (maintaining that there activity clause the constitution). fact, they far suggest that impose such requirement would bold and radical. According the defendants, because the Supreme Court has never identified distinction between activity and inactivity limitation Congress commerce power, hold otherwise would break new legal ground and novel and unprecedented. See Def. Opp. 16. First, interesting that the defendants --- apparently believing the best defense good offense --- would use the words novel and unprecedented since, previously noted, those are the exact same words that the CRS and CBO used describe the individual mandate before became law. Furthermore, there simple and rather obvious reason why the Supreme Court has never distinguished between activity and inactivity before: has not been called upon consider the issue because, until now, Congress had never attempted exercise its Commerce Clause power such way before. See CBO Analysis (advising Congress during the previous health care reform efforts 1994 that [t]he government has never required people buy any good service condition lawful residence the United States.). every Supreme Court case decided thus far, Congress was not seeking regulate under its commerce power something that could even arguably said passive inactivity.17 note that Gibbons Ogden, where Chief Justice Marshall described the Federal Commerce power with breadth never yet exceeded [Wickard, supra, 317 U.S. 111], commerce was defined intercourse. Even that word would would radical departure from existing case law hold that Congress can regulate inactivity under the Commerce Clause. has the power compel otherwise passive individual into commercial transaction with third party merely asserting --- was done the Act --- that compelling the actual transaction itself commercial and economic nature, and substantially affects interstate commerce [see Act 1501(a)(1)], not hyperbolizing suggest that Congress could almost anything wanted. difficult imagine that nation which began, least part, the result opposition British mandate giving the East India Company monopoly and imposing nominal tax all tea sold America would have set out create government with the power force people buy tea the first place. Congress can penalize passive individual for failing engage commerce, the enumeration powers the Constitution would have been vain for would difficult perceive any limitation federal power [Lopez, supra, 514 U.S. 564], and would have Constitution name only. Surely this not what the Founding Fathers could have intended. See id. 592 (quoting Hamilton the New York Convention that there would just cause reject the Constitution would allow the federal government penetrate the recesses domestic life, and control, all respects, the private conduct individuals) (Thomas, J., concurring). Lopez, the Supreme Court struck down the Gun Free School Zones Act 1990 after stating that, the statute were
seem carry with implicit presumption least some sort preexisting dealing between people entities. See Samuel Johnson, Dictionary the English Language (4th ed. 1773) (defining intercourse Commerce; exchange and Communication). Furthermore, one the amici notes their brief, the word regulate the Commerce Clause itself would also appear presuppose action upon some object activity that already extant (see doc. 121 n.1, citing Samuel Johnsons dictionary defining regulate to adjust rule method to direct). Thus, regulator comes existing phenomenon and orders it. Id.
upheld, we are hard pressed posit any activity individual that Congress without power regulate. See id. 564. (emphasis added). some type already-existing activity undertaking were not considered prerequisite the exercise commerce power, would beyond the concern articulated Lopez for would virtually impossible posit anything that Congress would without power regulate. previously noted, the Supreme Court has summarized and defined the current state the law under the Commerce Clause, and has uniformly and consistently declared that applies three broad categories activity. Lopez, supra, 514 U.S. 558 (emphasis added); accord Morrison, supra, 529 U.S.
608. has further described the third category the power regulate those activities having substantial relation interstate commerce. Lopez, supra, 514
U.S. 558-59 (emphasis added); accord Morrison, supra, 529 U.S. 609; see also Raich, supra, 545 U.S. 17; Perez, 402 U.S. 150; Wickard, supra, 317
U.S. 124; Darby, supra, 312 U.S. 119-20; Jones Laughlin Steel, supra, 301
U.S. 37. Without doubt, existing case law thus extends only those activities that have substantial relationship to, substantially affect, interstate commerce. required interpret this law the Supreme Court presently defines it. Only the Supreme Court can redefine expand further --- point implicitly made one the defendants own cited authorities. See Stern, supra, 1363 (stating that the Supreme Court had one point time only talked about movement goods across state lines under the Commerce Clause because was necessary decide those earlier cases and there had been need for broader definition commerce; going opine that it would seem timely that the Supreme Court expand the definition, the time has now arrived for the [Supreme] Court cut loose from the old approach and select the new one) (emphasis added).
Having found that activity indispensable part the Commerce Clause
analysis (at least currently understood, defined, and applied Supreme Court case law), the Constitutionality the individual mandate will turn whether the failure buy health insurance activity.
(ii) the Failure Purchase Health Insurance Activity?
Preliminarily, based solely plain reading the Act itself (and common
sense interpretation the word activity and its absence), must agree with the
plaintiffs contention that the individual mandate regulates inactivity. Section 1501
states relevant part: If applicable individual fails [buy health insurance],
there hereby imposed penalty. its very own terms, therefore, the statute
applies person who does not buy the government-approved insurance; that is, person who fails act pursuant the congressional dictate. fact, prior
final passage the Act, CRS attorneys advised Congress that was unclear
the individual mandate had solid constitutional foundation specifically because:
One could argue that while regulation the health insurance industry the health care system could considered economic activity, regulating choice purchase health insurance not. may also questioned whether requirement purchase health insurance really regulation economic activity enterprise, individuals who would required purchase health insurance are not, but for this regulation, part the health insurance market. general, Congress has used its authority under the Commerce Clause regulate individuals, employers, and others who voluntarily take part some type economic activity. While Wickard and Raich, the individuals were participating their own home activities (i.e., producing wheat for home consumption and cultivating marijuana for personal use), they were acting their own volition, and this activity was determined economic nature and affected interstate commerce. However, [the individual mandate] could imposed some individuals who engage virtually economic activity whatsoever. This novel issue: whether this type required
participation can considered economic activity. CRS Analysis, supra, (emphasis added).
The defendants insist that the uninsured are active. fact, they even far make the claim --- which the plaintiffs call absurd --- that going without health insurance constitutes economic activity even greater extent than the plaintiffs Wickard Raich. See Def. Mem. 29. They offer two (somewhat overlapping) arguments why the appearance inactivity here just illusion.
(iii) The Purported Uniqueness the Health Care Market
The defendants contend that there are three unique elements the health care market which, when viewed cumulatively and combination, belie the claim that the uninsured are inactive.18 First, living and breathing human beings who are always susceptible sudden and unpredictable illness and injury, one can opt out the health care market. Second, and when health services are sought, hospitals are required law provide care, regardless inability pay. And third, the costs incurred cannot paid (which they frequently cannot, given the high cost medical care), they are passed along (cost-shifted) third parties, which has economic implications for everyone. Congress found that the uninsured received approximately $43 billion uncompensated care 2008 alone. These three things, according the defendants and various health care industry experts and scholars whom they rely, are replicated other market and defeat the During oral argument, the plaintiffs opposed defining the relevant market broadly one for health care, insisting that the only relevant market for purposes analyzing the individual mandate the more specific health insurance market. agree that the plaintiffs position the more precise and accurate. Every market can broadly defined way that encompasses the specific characteristics one seeks reach include. Nonetheless, will consider and examine the defendants claim that the individual mandate justifiable because the much broader health care market purportedly unique.
argument that uninsured individuals are inactive.19
First, not all clear whether why the three allegedly unique factors the health care market are Constitutionally significant. What only one the three factors identified the defendants present? After all, there are lots markets --- especially defined broadly enough --- that people cannot opt out of. For example, everyone must participate the food market. Instead attempting control wheat supply regulating the acreage and amount wheat farmer could grow Wickard, under this logic, Congress could more directly raise too-low wheat prices merely increasing demand through mandating that every adult purchase and consume wheat bread daily, rationalized the grounds that because everyone must participate the market for food, non-consumers wheat bread adversely affect prices the wheat market. Or, was discussed during oral argument, Congress could require that people buy and consume broccoli regular intervals, not only because the required purchases will positively impact interstate commerce, but also because people who eat healthier tend healthier, and are thus more productive and put less strain the health care system. Similarly, because virtually one can divorced from the transportation market, Congress could require that everyone above certain income threshold buy General Motors automobile --- now partially government-owned --- because those who not buy cars (or those who buy foreign cars) are adversely impacting commerce and taxpayer-subsidized business. pause here emphasize that the foregoing not irrelevant and fanciful For example, their briefs and during oral argument, the defendants cited and relied the amicus brief filed impressive list nearly forty economic scholars, who have urged that these three observations not exist other contexts and establish that the uninsured are not inactive and passive bystanders, but rather they participate the market for medical services and necessarily affect the market for health insurance (doc. 125 6-13).
parade horribles. Rather, these are some the serious concerns implicated the individual mandate that are being discussed and debated legal scholars. For example, the course defending the Constitutionality the individual mandate, and responding the same concerns identified above, often-cited law professor and dean the University California Irvine School Law Erwin Chemerinsky has opined that although what people choose eat well might regarded personal liberty (and thus unregulable), Congress could use its commerce power require people buy cars. See ReasonTV, Wheat, Weed, and Obamacare: How the Commerce Clause Made Congress All-Powerful, August 25, 2010, available at: http://reason.tv/video/show/wheat-weed-and-obamacare-how-t. When mentioned this the defendants attorney oral argument, allowed for the possibility that maybe Dean Chemerinsky right. See Tr. 69. Therefore, the potential for this assertion power has received least some theoretical consideration and has not
been ruled out Constitutionally implausible.20 what two the purported unique factors --- inevitable participation coupled with cost-shifting --- are present? For example, virtually one can opt out the housing market (broadly defined) and majority people will some point There perhaps general assumption that ridiculous believe that Congress would such thing, even though could. However, before Wickard was decided, likely that most people (including legal scholars and judges) would have thought equally ridiculous believe that Congress would one day seek (and permitted) regulate (as interstate commerce) the amount wheat that farmer grew small private farm for his personal consumption. any event, even such assumption well-founded, the limitation congressional authority not solely matter legislative grace. See Morrison, supra, 529 U.S. 616; see also id. 616 n.7 (stating that legislative power not limited only the Legislatures self-restraint); cf. United States Stevens, --- U.S. ---, 130 Ct. 1577, 1591, 176 Ed. 435 (2010) ([T]he [Constitution] protects against the Government; does not leave the mercy noblesse oblige. would not uphold unconstitutional statute merely because the Government promised use responsibly.).
buy home. The vast majority those homes will financed with mortgage, large number which (particularly difficult economic times, have seen most recently) will into default, thereby cost-shifting billions dollars third parties and the federal government. Should Congress thus have power under the Commerce Clause preemptively regulate and require individuals above certain income level purchase home financed with mortgage (and secured with mortgage guaranty insurance) order add stability the housing and financial markets (and guard against the possibility future cost-shifting because defaulted mortgage), the theory that most everyone currently, inevitably one day will be, active the housing market? alluding these same general concerns, another court has observed that requiring advance purchase health insurance based future contingency that will substantially affect commerce could also apply transportation, housing, nutritional decisions. This broad definition the economic activity subject congressional regulation lacks logical limitation and unsupported Commerce Clause jurisprudence. See Virginia, supra, 728 Supp. 781. That the defendants argument unsupported Commerce Clause jurisprudence can perhaps best seen looking Lopez. Although that case distinct from this one some notable ways (e.g., involved brief, single-subject criminal statute that did not contain detailed legislative findings), the context the defendants health care unique argument, quite similar. Lopez, the majority was concerned that using the Commerce Clause regulate things such possession guns school zones would obliterate the distinction between what national and what local and effectively create centralized government that could potentially permit Congress begin regulating any and all aspects our lives, including marriage, divorce, child custody, and education. The dissent insisted that this concern was unfounded because the statute issue was aimed curbing particularly acute threat violence schools that had singularly disruptive potential. Supra, 514 U.S. 624 (Breyer, J., dissenting). Relying empirical evidence documented scholars, the dissent highlighted the link between education and the national economy and the special way which guns and education are incompatible. See id. The impact commerce, was urged, derived from the unchallenged fact that violent crime school zones has brought about decline the quality education which, turn, has an adverse impact interstate commerce. See id. 623 (citation and quotation marks omitted). This was the rare case, then, that statute strikes conduct that (when considered the abstract) seems removed from commerce, but which (practically speaking) has significant impact upon commerce. Id. (all emphasis added).
Two things become apparent after reading these arguments attempting justify extending Commerce Clause power the legislation that case, and the majority opinion (which the controlling precedent) rejecting those same arguments. First, the contention that Commerce Clause power should upheld merely because the government and its experts scholars claim that being exercised address particularly acute problem that singular[ ], special, and rare --- that say unique --- will not itself win the day. Uniqueness not adequate limiting principle every market problem is, some level and some respects, unique. Congress asserts power that exceeds its enumerated powers, then unconstitutional, regardless the purported uniqueness the context which being asserted.
Second, and perhaps more significantly, under Lopez the causal link between what being regulated and its effect interstate commerce cannot attenuated and require